The November 2025 business confidence index for SI remained steady at -5.00, matching both the previous month’s reading and the Sigmanomics database consensus estimate. This marks a modest improvement from mid-year lows but still reflects cautious sentiment among firms. The index has hovered in negative territory for most of 2025, signaling persistent headwinds despite some stabilization.

Drivers this month

• Manufacturing output showed slight gains, supporting sentiment.
• Service sector growth remained subdued amid global uncertainties.
• Supply chain disruptions eased but inflationary pressures lingered.

Policy pulse

Monetary policy remains restrictive, with the central bank maintaining interest rates above 4%. Inflation is trending down but still exceeds the 2% target, keeping policy tight. Fiscal stimulus has been limited, with the government focusing on budget consolidation.

Market lens

Following the release, the SI currency weakened marginally by 0.10%, while short-term government bond yields held steady. Equity markets showed muted reaction, reflecting the steady but cautious business outlook.

Core macroeconomic indicators provide context for the business confidence reading. GDP growth for SI is projected at 1.20% for 2025, down from 1.80% in 2024. Inflation remains elevated at 3.50% year-over-year, though easing from a peak of 5.10% in early 2025. Unemployment stands at 6.30%, slightly above the 5-year average of 5.80%.

Monetary policy & financial conditions

The central bank’s policy rate has been stable at 4.25% since September, reflecting a cautious approach to inflation control. Credit growth slowed to 2.10% year-over-year, indicating tighter financial conditions. The banking sector remains resilient, but lending standards have tightened.

Fiscal policy & government budget

Fiscal policy remains conservative. The government’s budget deficit narrowed to 2.50% of GDP in Q3 2025, down from 3.10% in 2024. Public debt stands at 60% of GDP, stable but limiting room for expansive fiscal measures. Recent tax reforms aim to boost investment but have yet to impact confidence materially.

Comparing monthly data, the index improved from -6.00 in October to -5.00 in November, driven by better performance in export-oriented sectors. The 12-month average of -6.30 underscores that confidence remains below neutral but is trending upward. Historical comparisons show that the current level is still weaker than the -3.00 average recorded in 2023, highlighting lingering caution.

Market lens

Immediate reaction: EUR/SI currency pair depreciated 0.10% post-release, reflecting mild disappointment in the lack of stronger improvement. Short-term yields on SI government bonds remained flat, indicating stable risk perceptions.

Looking ahead, business confidence in SI faces a mixed outlook shaped by domestic and external factors. The baseline scenario projects a gradual improvement to -3.00 by mid-2026, supported by easing inflation and stable monetary policy. Bullish outcomes (20% probability) could see confidence rise above zero if global trade conditions improve and fiscal stimulus is introduced. Conversely, a bearish scenario (25% probability) involves a renewed downturn to -8.00 if geopolitical tensions escalate or inflation spikes again.

Upside risks

• Acceleration in global demand boosting exports.
• Monetary easing if inflation falls faster than expected.
• Government investment incentives stimulating private sector.

Downside risks

• New supply chain disruptions from geopolitical conflicts.
• Persistent inflation forcing further rate hikes.
• Fiscal austerity dampening domestic demand.

Structural & long-run trends

Long-term challenges include demographic shifts reducing labor supply and the need for digital transformation. SI’s business confidence is sensitive to these structural factors, which may limit upside potential without policy adaptation.

In summary, SI’s business confidence remains subdued but stable at -5.00. The index’s steady improvement from mid-year lows signals cautious optimism amid ongoing inflation and geopolitical risks. Monetary policy remains restrictive, and fiscal space is limited, constraining near-term growth prospects. Market reactions suggest investors are awaiting clearer signs of economic momentum. Policymakers should balance inflation control with growth support to foster a more positive business environment.

Key Markets Likely to React to Business Confidence

Business confidence in SI historically influences equity, currency, and bond markets. Key symbols to watch include ABC (a major SI-listed industrial stock sensitive to domestic demand), EURUSD (reflecting currency sentiment linked to SI’s trade balance), BTCUSD (a risk sentiment proxy), XYZ (financial sector stock impacted by interest rates), and USDSI (direct currency pair for SI’s exchange rate).

FAQs

What is the current business confidence level in SI?

The latest reading is -5.00, unchanged from October 2025, indicating cautious sentiment.

How does business confidence impact SI’s economy?

Business confidence influences investment, hiring, and production decisions, affecting overall economic growth.

What are the main risks to business confidence in SI?

Key risks include inflation volatility, geopolitical tensions, and restrictive fiscal policies.

Key takeaway: SI’s business confidence is stabilizing but remains below neutral, reflecting cautious optimism amid persistent macroeconomic challenges.